What should I know and be aware of before buying an insurance package?

How much coverage you require, what kind of coverage you need, and for how long.
If you follow the rules of thumb, you wouldn't be spending more than 10% of your income on insurance.

They are:

10 X Annual Income in the event of Death if you have dependents and liabilities.

5 X Annual Income in the event of Illness (even if you're single).

Firstly, know what your needs are, and then know what the insurance package covers you for. Does the coverage match your need? You do not want to be under-insured (if something happens, you would still be in need of money), or over-insured (you're paying for it after all)

Example: You have a mortgage loan of $500K and 2 dependents who are in primary school. Insuring yourself for something like $250K upon death is probably insufficient, and insuring for $25 million is probably overkill.

Next, would be to know what are the specific criteria for the insurance package that would trigger a payout, and if there are any conditions that may lead to no payout.

Example: You wish to get critical illness coverage, but not all stages may lead to a payout (it depends on the severity of the critical illness)

Also, know what you need to pay (the premium), and whether it is guaranteed, or may be adjusted in future years due to changes in claims experience, etc. Also, know the duration for which you need to pay the premium, and the duration of the coverage provided.

Example: A limited pay plan may cover you for life, while you only need to pay for 10,15 or 20 years. Contrast this with a term plan, whereby the payment term and coverage term are usually the same. Hospitalization plans premiums are not guaranteed.

Lastly, do ensure that the premiums you are paying are cost effective so that you are getting your money's worth.